Panoramic Stock Images, Ltd. v. McGraw-Hill Companies, Inc., The

Filing 103

Panoramic's motion for clarification 98 is granted. Final Pretrial Order date of 2/25/2015 and Jury Trial set for 4/6/2015 to stand. MEMORANDUM Opinion and Order Signed by the Honorable Rebecca R. Pallmeyer on 1/27/2015. Mailed notice. (etv, )

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
PANORAMIC STOCK IMAGES, LTD
d/b/a PANORAMIC IMAGES,
Plaintiff,
v.
McGRAW-HILL GLOBAL EDUCATION
HOLDINGS, LLC and Mc-GRAW-HILL
SCHOOL EDUCATION HOLDINGS, LLC
Defendants.

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No. 12 C 9881
Judge Rebecca R. Pallmeyer

MEMORANDUM OPINION AND ORDER
Plaintiff Panoramic Stock Images, Ltd. has sued Defendant McGraw-Hill Global
Education Holdings, LLC and McGraw-Hill School Education Holdings, LLC (collectively,
"McGraw-Hill") for copyright infringement concerning the use of Panoramic's photographs in
various McGraw-Hill publications. In its November 25, 2014 order [85], the court resolved the
parties' cross-motions for partial summary judgment concerning McGraw-Hill's liability and the
availability of certain affirmative defenses. Specifically, the court denied McGraw-Hill's motion
for summary judgment "on the issue of whether the Copyright Act’s three-year statute of
limitations bars Panoramic's claims"; denied Panoramic's motion for summary judgment as to
liability for the claims listed in rows 6 and 48 of the complaint; and granted Panoramic's motion
for summary judgment as to liability on the remaining claims. (Mem. Op. & Order [85], 17.)
Panoramic now requests clarification of one aspect of that ruling. Specifically, in footnote five
the order, the court stated:
McGraw-Hill separately argues that all printings and distributions of the book
1995 Science Interactions Course 2 were completed by 2008. Thus, even if the
discovery rule applies, Panoramic may not recover damages for infringements
related to this title (listed in Row 6 of Exhibit A to the Complaint). (See Def.'s
Resp. to Pl.'s Part. Mot. for Sum. Judg. at 6.) Panoramic does not dispute this
fact (see Pl.'s Resp. to Def.'s Further Stat. of Add'l Facts [75-1], ¶ 1), but neither
party has addressed whether the same is true for other allegedly infringing
publications. The court declines to resolve the issue concerning this single book

in McGraw-Hill's favor at this time, but will do so if there are no disputes
concerning the timing of this infringement.
(Id. at 10.) Panoramic argues that this footnote is inconsistent with the court's conclusion that
the discovery rule applies to Panoramic's copyright infringement claims.

For the reasons

explained below, the court agrees that this footnote is inconsistent and vacates it in its entirety.
The court therefore will grant summary judgment to Panoramic on the issue of McGraw-Hill's
liability for infringement on claim 6.
DISCUSSION
While stylized as a "motion for clarification," the court construes Panoramic's motion as a
motion for reconsideration under Federal Rule of Civil Procedure 54(b). That rule provides that
"any order or other decision, however designated, that adjudicates fewer than all the claims or
the rights and liabilities of fewer than all the parties does not end the action as to any of the
claims or parties and may be revised at any time before the entry of a judgment adjudicating all
the claims and all the parties' rights and liabilities." Motions for reconsideration "serve a limited
function: to correct manifest errors of law or fact or to present newly discovered evidence."
Caisse Nationale de Credit Agricole v. CBI Indus., 90 F.3d 1264, 1269 (7th Cir. 1996) (citation
omitted). A motion for reconsideration "does not provide a vehicle for a party to undo its own
procedural failures, and it certainly does not allow a party to introduce new evidence or advance
arguments that could and should have been presented to the district court prior to the
judgment." Bordelon v. Chicago Sch. Reform Bd. of Trs., 233 F.3d 524, 529 (7th Cir.2000)
(internal quotation marks and citation omitted). The court will, however, grant a motion to
reconsider when it "has patently misunderstood a party, or has made a decision outside the
adversarial issues presented to the Court by the parties, or has made an error not of reasoning
but of apprehension." Bank of Waunakee v. Rochester Cheese Sales, Inc., 906 F.2d 1185,
1191 (7th Cir.1990) (citation omitted).

The court concludes that the prior order should be revised for several reasons. First,
Panoramic correctly states governing Seventh Circuit law when, in its brief, it explains that
"[u]nder the discovery rule, a copyright owner is entitled to recover for infringements, regardless
of when they occurred, so long as he or she did not have actual or constructed notice of the
infringements more than three years before filing." (Mot. for Clarification [98], 3-4.) In the order,
this court concluded that "a reasonable jury could find that Panoramic did not learn, and
reasonably could not have learned, that McGraw-Hill infringed specific Panoramic copyrights
until at least October 2012, when the employee from John Wiley & Sons contacted Mr. Segal."
(Mem. Op. & Order at 7.) Based on such a finding, and based on the court's conclusion that the
discovery rule applies, a reasonable jury could find that none of Panoramic's claims "accrued,"
for the purposes of the Copyright Act's three-year statute of limitations, until October 2012. See
17 U.S.C. § 507(b) ("No civil action shall be maintained under the [Act] unless it is commenced
within three years after the claim accrued.") (emphasis added). Panoramic filed this lawsuit just
two months later, in December 2012. The court agrees that Panoramic may pursue damages
for all infringing activity that it first became aware of in October 2012, including infringements
that ended in 2008 (e.g., 1995 Science Interactions Course 2 book).
This result is consistent with Seventh Circuit authority applying the discovery rule. See,
e.g., Taylor v. Meirick, 712 F.2d 1112, 1119 (7th Cir. 1983) ("[S]ince Taylor was unaware of the
infringements until 1979, and (in part because of Meirick's efforts at concealment) could not
have been expected to discover them earlier by the exercise of reasonable vigilance, either of
the tolling principles [e.g., the discovery rule] discussed earlier would allow him to collect
damages for acts of infringement more than three years in the past, at least if he acted promptly
once he discovered them, and he did.").

It is also consistent with the instruction Judge

Feinerman of this court gave to his jury in a recent trial involving substantially similar claims of
copyright infringement. In Panoramic Stock Images, Ltd. v. John Wiley & Sons, Inc., No. 12-cv-

10003 (N.D. Ill. filed Dec. 17, 2012), Judge Feinerman instructed the jury with respect to a
statute of limitations defense as follows:
If you find that Panoramic has proved that it did not actually learn and could not
reasonably have learned of Wiley’s alleged infringement of that photograph
before December 17, 2009, then there is no "cut-off" date for that photograph,
which means that in evaluating Panoramic’s claim as to that photograph, you
must consider all alleged infringements regardless of when they occurred.
(Statute of Limitations Jury Instruction in Panoramic Stock Images, Ltd. v. John Wiley & Sons,
Inc., No. 12-cv-10003, Ex. 1 [98-1] to Pl.'s Mot. for Clarification.) This instruction correctly states
the law and would apply to the present case as follows: if a jury finds that Panoramic did not
learn of McGraw-Hill's infringing activity before October 2012, the jury "must consider all alleged
infringements regardless of when they occurred."
Contrary to McGraw-Hill's arguments, Chicago Building Design, P.C. v. Mongolian
House, Inc., 770 F.3d 610, 618 (7th Cir. 2014), does not change the analysis. There, at least
some infringing activity occurred within three years of the plaintiff's filing of the lawsuit, so the
Court concluded that the statute of limitations did not bar the plaintiff's claims:
More fundamentally, however, in light of Petrella, we now know that the right
question to ask in copyright cases is whether the complaint contains allegations
of infringing acts that occurred within the three-year look-back period from the
date on which the suit was filed. Here, the answer to that question is plainly
"yes." The complaint alleges that Perres, Golden, and Wilson distributed the
infringing blueprints to building inspectors during inspections in July 2009 and
periodically thereafter, through January 2012. These acts fall within the threeyear limitations period from the date of suit (February 13, 2012).
Chicago Bldg. Design, P.C., 770 F.3d at 616. Significantly, as the prior order in this case
pointed out (see Mem. Op. & Order at 6), the court in Chicago Building Design expressly
declined to decide whether Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S. Ct. 1962 (2014) had
abrogated the Seventh Circuit's discovery rule:
A final word on the statute-of-limitations: If on remand CBD continues to claim a
right to recover for infringing acts that occurred in 2008, outside the three-year
look-back period, the parties will need to address whether Petrella abrogates the
discovery rule in copyright cases. We express no opinion on that question today.
The parties have not briefed it, and it may not arise on remand.

Chicago Bldg. Design, P.C., 770 F.3d at 618. The parties in this case have briefed the issue,
but this court agrees with its colleagues (see cases cited at pages 6-7 of the court’s earlier
ruling) that the Supreme Court’s reference to this doctrine in a footnote in Petrella did not in fact
abrogate the rule. To the contrary, the Court expressly reserved the question of whether the
discovery rule is still good law, which means that Seventh Circuit binding precedent applying
that doctrine (see Taylor, 712 F.2d at 1118, and Gaiman v. McFarlane, 360 F.3d 644 ,653 (7th
Cir. 2004)) applies to this case. To the extent footnote five suggested that claim six was timebarred, that conclusion was in error, i.e., one of "apprehension," Bank of Waunakee, 906 F.2d at
1191. The court hereby vacates footnote five from the opinion.
CONCLUSION
For the reasons stated above, Panoramic's motion for clarification is granted. The court
vacates footnote five in the prior opinion and grants summary judgment to Panoramic on the
issue of McGraw-Hill's liability for infringement concerning claim 6.

ENTER:

Date: January 27, 2015

____________________________
REBECCA R. PALLMEYER
United States District Judge